Han Ximin

ximhan@126.com

FUTIAN police have busted a criminal ring that cheated some 30,000 people across the country out of 470 million yuan (US$69 million) through an artwork trading scam.

Seventeen people were arrested.

The suspects set up an online trading platform, called Mei Tong Tian Xia, with complicated trading rules to attract investors to speculate on artwork.

The platform, established in December last year, chose some prints of limited edition works of art by well-known artists for registered members to purchase online and sell in the secondary market.

One investor, surnamed Wu, bought 1,000 prints, each for 60 yuan, after seeing the pictures on the suspects’ website.

Although they hadn’t seen the art products with their own eyes, they were informed by the agents that the products could be sold at higher prices in secondary markets.

In February, the system showed the price of the prints had risen to 138 yuan. This attracted more attention from investors and the platform informed investors that it would circulate a total of 3 million copies of the prints Feb. 21, each for 99 yuan. Each registered investor could purchase 10,000 copies through their account.

After investors purchased the copies of the prints, the platform would set a new condition that only 10 percent of the investors, who would be randomly selected by the platform, could trade their prints in the secondary market. The other 90 percent of the investors could only sell their products if they had bought a certain amount of new prints in the secondary market. On March 14, the price of a print rose from 99 yuan to 303 yuan. The investors had to purchase more prints from the secondary market to prevent greater losses.

The police investigation showed the lucky investors were mainly the sales agents. On March 14, the price of the prints plunged below the 99-yuan offering price, causing heavy losses for investors.

On the same day, the platform left a notice saying that it couldn’t operate normally and would resume business in two months, leaving no way for investors to get a return on their investments through so-called artwork trading.

“It is an illegal fundraising platform using artwork speculation and fake transactions,” a police officer said.

As of April 13, three months after opening, the platform had raised 470 million yuan through its 13 operation centers in the country and more than 700 agents. The platform counted around 30,000 registered members with even the smallest investors having bought hundreds of prints.